Interim Payment of Corporate tax
Date: Aug 21, 2020
This post will briefly look into the interimpayment of corporate tax.
II. Interim Payment of corporate tax
(1) The obligation of interim payment
A domestic corporation which has the end dateof the business year in December should file an interim corporate tax returnand make a payment by August 31st for the period of Jan 1stand June 30th.
(2) Subjects of exemption
￭ Newly established corporation in 2020(excepting corporations newly incorporated as a consequence of the merger ordivision)
￭ A corporation which does not have anyamount of income due to the suspension of its business during the interimprepayment period
￭ A corporation which has no longer than 6months of business year
￭ Special purpose company, an investmentcompany, investment limited liability company, investment association, acorporate restructuring investment company established under theCorporate-Restructuring investment Companies Act, A real estate investmentcompany for corporate restructuring or real estate investment company forentrusted management, established under the Real-Estate-Investment Company Act,a company specializing in cultural industries, an overseas resourcesdevelopment company
￭ Foreign invested company exempted fromcorporate tax
￭ Non-profit corporation with interestincome only
￭ Private schools established under thePrivate School Act, Industry-academic corporation groups defined in theIndustrial Education Enhancement and Industry-Academia-Research CooperationPromotion Act, Seoul National University established under the Act on theEstablishing and Administrating Seoul National University, Incheon NationalUniversity established under the Act on Establishing and AdministratingIncheon-National University
￭ A domestic corporation, whichis a small and medium enterprise in the business year immediately preceding therelevant business year, with the amount calculated is less than 300,000 won
(3) Filing interim corporate tax return
Electronic reporting is available on thewebsite of National Tax Service from August 1st. Corporations aregiven two options. Paying half of the computed amount of taxfor the immediately preceding business year as a base or paying corporate taxduring the relevant interim prepayment period from January to June this year
Where the amount of tax payable by a domesticcorporation exceeds 10,000,000 won, some of the tax payable may be paid ininstallments within one month (two months for small and medium enterprises)after expiration of the payment deadline
III. Support Measures for COVID19 - Refund byRetroactive Deduction of Losses for Small and Medium Enterprises
(1) Creating special cases concerning refund byincome deduction of losses for small and medium corporations.
The government has introduced special casesconcerning refund by income deduction of losses for small and medium sizedcorporations to relieve financial burdens of those companies.
Small and medium sized companies with abusiness year that exceeds 6 months are able to get early refund for the lossesoccurred during interim corporate tax filing period when filing interimcorporate tax return.
Submit an application form of Refund byRetroactive Deduction of Losses for Small and Medium Enterprises and submit itto the tax office having jurisdiction over the place of tax payment
(3) Imposing on taxes refunded
In any of the following cases, the head of thetax office having jurisdiction over the place of tax payment shall collect anamount computed by adding an amount equivalent to the interest calculated tothe amount of tax to be refunded as corporate tax for the business year inwhich the relevant losses have been incurred
☞ Where losses havedecreased after correcting the tax base and the amount of corporate tax for thebusiness year in which the losses incurred after corporate tax was refunded
☞ Where the amount of taxto be refunded has decreased as a result of the rectification of the tax baseand tax amount for corporate tax for the business year immediately before the businessyear in which the losses were incurred
☞ Where a domesticcorporation, other than small and medium enterprises has received a refund ofcorporate tax.
☞ Where there is anychange to the amount of corporate tax or tax base for the immediately precedingbusiness year which becomes a basis for calculating the original amount of taxto be refunded after the head of the tax office having jurisdiction over theplace of tax payment determines the amount of tax to be refunded, he/she shallimmediately correct the original amount of tax to be refunded and then refundit additionally or collect the amount equivalent to the tax amount over-refunded.
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